Royal Mail offer Compulsory new (chargeable) Integrator Contracts

In a move which will shake up the carrier industry and prompt more carriers to assess their charges, we understand that Royal Mail are to offer third party integrators new contracts for using their API. The downside is that these new contracts will incur charges payable to Royal Mail.

We were a bit surprised to hear this news, especially as we’re aware that many third party integrators use the guys at NetDespatch for their Royal Mail integration. It looks like even integrators using NetDespatch instead of a direct integration with Royal Mail may be pushed to the new contracts.

We asked NetDespatch for a comment but they were unable to shed much light on the situation simply saying: “We haven’t had visibility yet, but as soon as we do we will provide an update to our Partners” (It’s worth remembering that although Royal Mail acquired NetDespatch they’re still run as a separate business).

We’ve heard different figures for the Royal Mail integration costs, which range from a low four figure sum for a basic integration multiple thousands of pounds for higher volume users. On top of the integration costs, Royal Mail are apparently also asking third parties to sign up for support contracts as well as various financial penalties if something such as your firewall goes wrong.

Up until now, carrier API integrations in general and access to Royal Mail’s API or OBA integrations in particular have been free. It appears that they’ll still be free to retailers, but if you’re using a third party integrator’s service (pretty much any channel management program that produces labels for you) then they will be charged.

These charges are going to be passed on to retailers in one form or another. Unfortunately it also means that the barrier to entry in the label production business is going up. If you’re thinking of setting up a new online solution and discover that your Royal Mail integration will perhaps cost you ten grand or so in the first year before you have any customers, it might deter you from launching a new solution in the first place.

The other possibility is that third party integrators will simple ensure that their software is “Royal Mail” ready rather than offering a complete integration. At this stage there’s no indication that individual retailers will be charged for integrations and certainly individuals have always been welcomed by NetDespatch.

I’m wondering which channel management solution provider will be first to reject the new contract and advise many thousands of their users to individually contact NetDespatch for a replacement integration? It’ll do the same job, but just be set up on a one by one basis instead of a single setup with the solution provider.

We’d love to hear if you’re an integrator who have been offered a new Royal Mail contract for API / OBA integration. We’re also keen to hear if any other mail or courier companies start to charge for access to their back end systems. It seems counter-intuitive – they want to charge us for the privilege of buying their services.